Talks are continuing over the sale of British Steel as a deal was completed for a subsidiary of the business.

Turkish company Ataer Holdings was announced earlier this month as the preferred bidder for the Scunthorpe-based steel giant, which has been in liquidation since May.

The firm, a subsidiary of Turkey's state military retirement scheme Oyak, has been in exclusive talks over the takeover of British Steel since signing a preliminary agreement to buy the company.

Today, it has been announced that York-based infrastructure design consultancy TSP Projects, a wholly-owned British Steel subsidiary, has been sold to French engineering giant Systra in a move which will preserve more than 400 jobs.

It means TSP Projects (TSPP) becomes the first British Steel division to be sold since the High Court order placing the company into compulsory liquidation.

The Official Receiver, who has been in control of British Steel since its collapse, has confirmed today's deal has no impact on the sale of the wider British Steel business, including the Scunthorpe steelworks.

Talks are continuing over the sale of the British Steel works in Scunthorpe (Image: David Haber/scunthorpelive)

A statement from the Official Receiver said: "Based in York, TSPP provides consultancy, design, engineering and on-site project management services.

"The sale of TSPP's shares to Systra Ltd – the UK subsidiary of French-based Systra Group – will expand Systra's footprint in the UK and preserve over 400 jobs at TSPP.

"This transaction is a solvent sale and TSPP is not in any insolvency proceedings and remains liable to continue to support its pension scheme.

"This sale has no impact on the proposed sale of the remaining British Steel group and exclusive talks with the preferred buyer, Ataer Holdings AS, are continuing."

Ataer Holdings is the largest stakeholder in Turkish steel group Erdemir and is in discussions with the Government advisors who have been running the sales process for British Steel since control of the business was handed to the Official Receiver.

It also remains in the process of carrying out due dilligence on the company, with officials hoping a deal can be concluded within around six to eight weeks of the prelininary agreement being signed.

A publicity photo from Erdemir, the Turkish steel manufacturer jointly owned by Ataer which is bidding for British Steel (Image: erdemir.com)

Reports earlier this month suggested the company would look to increase production at the Scunthorpe site and send metal directly to its own factories after the completion of any takeover of British Steel.

It is believed the Ataer bid would have significant support from the British government but the company is understood to have a strategy to develop the Scunthorpe steelworks and increase production at the site, as well as invest in converting it to being gas powered within 10 years.

After the preliminary agreement with Ataer Holidings was announced, British Steel's Scunthorpe works multi-union comittee chairman Paul McBean said it had given everybody at the site a lift.

He said: "They are willing to invest and that is what we have been looking for. They have got big plans for us and from speaking to them, they are spot on.

"They are from a steel background and we have always said we wanted someone from a steel background, so it is a good fit all round."